The Evolution Of Performance Management

The Evolution Of Performance Management

Performance management in firms has indeed come a long way. Its origins were humble, with punch cards trying to systematise worker shifts during the Industrial Revolution. Later, in the early 1900’s, during the first world, the first performance appraisals came into existence. Through the latter half of the century, as the science of management itself progressed, the science of performance management naturally followed. Along with these, as computers took over the collective imagination of an entire generation, the science of measuring and increasingly automating aspects of performance management increased in relevance.


Over the years, multiple and multi-faceted features of performance management have been in the limelight. It began with routinely administrative tasks like attendance, and increased to measurement-oriented practices like appraisals - and much later, moved to more holistic and people-centric priorities like employee motivation, engagement, teamwork, and seamless communication within workplaces. Not only is the business environment changing quickly, it is changing quicker than ever before, and on various fronts. The very definition of performance has become increasingly complex today. No longer are best practices restricted to the mechanistic six sigma policies of Toyota, or the shareholder value creation of dotcom companies from the early 2000s, or even the employee-friendly policies that were made popular by Google amongst the new age Silicon Valley employers. Defining, creating, and sustaining a high-performance organisation is no longer a question of a set of metrics, week-long courses for qualifications, or superior pay packages.


This attitudinal shift in the way we view our workplaces is a huge opportunity for organisations that are able to recognise the tremendous value waiting to be unlocked in their biggest assets - their people. We therefore need to examine as to how technology has helped raise the game for a vast number of firms through simple interventions (yielding disproportionate results), while at the same time, considering the common pitfalls, and how to make the most out of technology to drive the best results for your firm.


 “An attitudinal shift in the way we view our workplaces is a huge opportunity for organisations that are able to recognise the tremendous value waiting to be unlocked in their biggest assets - their people.”



Technology-driven performance management


The biggest difference that technology has made is in its seamless integration into administrative departments to take care of repetitive tasks. With this, technology actually allows you to focus on business drivers and enhance value creation. Attendance, scheduling, and payrolls are some of the key solutions that you would have to search hard to find a firm without. Most of these tasks enjoy economies of scale, and therefore have traditionally been a disadvantage for smaller firms without the bandwidth to devote resources to such tasks. Consequently, these have been some of the biggest gainers, allowing them to specialise and create very lean organisations in terms of manpower and capacity utilisation.


Specialisation is a wider phenomenon though, and is not restricted to small firms. Across industries and scales of organisations, firms are becoming more specialised. As a result, they are squeezing out greater marginal utility out of functionally vital competences in an increasingly competitive and crowded business environment. Therefore, it is now not uncommon to see full-suite performance management solutions take over a much wider array of responsibilities. This is where we see some of the common pitfalls associated with PM tools, when full-suite solutions take over even the strategic thinking behind performance management, especially with broad strokes that paint a very diverse set of organisations all the same. The problem is, performance management is a vast and interconnected set of practices and philosophies, and organisations should have specific approaches to each of them on the basis of their unique priorities, value-drivers, and practical realities.


A strategic approach to using technology


One look at the complex range of technology solutions in the market today is bound to intimidate firms looking to automate their Performance Management (PM). But it really is as easy as ABC to make the most out of these products. Here are the steps that one must follow:


a. Understand the components of PM: Today, there are products that cover aspects of PM anywhere from attendance and analytics to hiring and appraisals. It even covers the gamut from feedback to even training and motivation! The key to deciding how to choose a solution for you is to understand the range of tasks you want to either introduce, improve, or automate.


b. Choosing focus objectives: The components of PM need to be evaluated based on their strategic relevance and importance to your firm given its current trajectory, business objectives, and resource capabilities. For instance, a small growing company might have the rapid and accurate hiring into growing teams as its key focus area. This will be supported by efficient evaluation that reduces costly hiring processes and discontinuities in their functioning. Large established companies on the other hand, especially those with rising levels of attrition, might want to focus on an improved process of appraisals and feedback. These are areas where technology can make significant improvements, for instance, helping with continuous feedback that is more actionable and timely than the usual annual reviews that most companies currently implement.


c. Automate and Integrate: Once you understand the components of Performance Management, you can choose the right ones for you, and decide the strategic approach you want to take with each of those components. With this, your potential pool of solutions will get narrowed down to a much more manageable number. In many cases, there will be tailor-made solutions for your requirements, and these will fit right in. In other cases, you might decide that a certain function is too strategic that it cannot be done in house, in which case, you might want to focus on integrating these components of PM with the other less-strategic ones that a full-suite solution can handle for you.


The fact is, the impact of technology on performance management is remarkable. As technology accelerates to take on more varied and nuanced aspects within HR teams, firms that are unable to capture these opportunities now will soon be left behind. Whatever your particular business needs, the conversation around technology in Performance Management needs to shift away from ‘whether to, or not’ towards a holistic, integrated approach to addressing innumerable opportunities that the new age Performance Management has brought with it. After all, this new age first heralds the right mindset and strategic thinking towards company objectives, and then nods towards the right set of technologies, deployed with maximal effectiveness.




 “This new age first heralds the right mindset and strategic thinking towards company objectives, and then nods towards the right set of technologies, deployed with maximal effectiveness.”

Diana Mathew Director of Operations and HR at SmartOwner. Her role encompasses multiple departments and their functions, including investor relations, people and HR practices, and ensuring the national expansion of the company and has previously headed operations for Free2Learn in London. Diana is a post-graduate from the London School of Economics with a specialisation in International Employment Relations and Human Resource Management.


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